A Financial Glossary — Terms You Need To Know

Welcome to the Financial Glossary for Wealth From Chaos on TimGamble.com. This resource is designed to help readers navigate the world of personal finance and investing, especially in chaotic times. Whether you’re new to financial concepts or seeking clarity on specific terms, these definitions provide straightforward explanations to empower you in building and protecting your wealth. 401(k): An employer-sponsored retirement plan where employees contribute pre-tax income, often with employer matching. Earnings grow tax-deferred until withdrawal, typically in retirement. Blockchain: A decentralized, digital ledger that records transactions across many computers, ensuring transparency and security. It underpins cryptocurrencies like Bitcoin and Ethereum. Bonds: Debt securities issued by governments or corporations. Investors lend money and receive interest payments over time, with the principal returned at maturity. Bonds are generally less risky than stocks. Capital: Money or assets used to generate wealth through investments, businesses, or other financial activities, including cash, stocks, real estate, or other resources. CD (Certificate of Deposit): A savings product offered by banks where money is deposited for a fixed period at a set interest rate. It earns higher interest than a savings account but penalizes early withdrawals. Cryptocurrency: Digital or virtual currencies using cryptography for security, operating on decentralized networks. Examples include: 

• Bitcoin (BTC): The first and most well-known cryptocurrency, often used as a store of value.
• Ethereum (ETH): A cryptocurrency with a blockchain supporting smart contracts for decentralized applications.
• Stablecoins: Cryptocurrencies pegged to assets like the U.S. dollar (e.g., USDT, USDC) to reduce price volatility.

Diversification: Spreading investments across different asset classes (stocks, bonds, precious metals, etc.) to reduce risk and improve portfolio stability. Dividend: A portion of a company’s profits paid to shareholders, typically quarterly, as a return on their investment. DRIPs (Dividend Reinvestment Plans): Programs allowing shareholders to automatically reinvest dividends into additional shares, often at a discount, to grow their investment over time. Emergency Fund: A savings reserve (typically 3–6 months of living expenses) set aside for unexpected events like job loss or medical emergencies, kept in accessible, low-risk accounts. ETFs (Exchange-Traded Funds): Investment funds traded on stock exchanges, holding a basket of assets (stocks, bonds, etc.). ETFs offer low fees, diversification, and flexibility to trade throughout the day. Generational Wealth: Wealth accumulated and passed down through multiple generations, often through assets like real estate, investments, or businesses, to provide financial security for descendants. Hedge: An investment strategy to offset potential losses in another investment, often using assets like gold or cryptocurrencies to protect against economic uncertainty. Inflation: The rate at which the general level of prices for goods and services increases, reducing purchasing power over time. IRA (Individual Retirement Account): A tax-advantaged account for retirement savings. Types include: 

• Traditional IRA: Contributions may be tax-deductible, with earnings growing tax-deferred until withdrawal (taxed as income).
• Roth IRA: Contributions are made with after-tax dollars, but qualified withdrawals, including earnings, are tax-free.
• SEP IRA: For self-employed individuals or small businesses, with higher contribution limits and tax-deferred growth.
• SIMPLE IRA: A plan for small businesses, allowing employer and employee contributions with tax-deferred growth.

Junk Silver: U.S. coins (e.g., dimes, quarters) minted before 1965, containing 90% silver. Valued for their silver content, they’re used as an investment or barter currency in economic crises. Liquidity: The ease with which an asset can be converted to cash without significant loss in value, such as cash in a savings account versus real estate. Money Market Account: A savings account offering higher interest rates than a regular savings account, often requiring a higher minimum balance and limiting withdrawals. Mutual Funds: Investment vehicles pooling money from multiple investors to buy a diversified portfolio of stocks, bonds, or other assets, managed by professionals with associated fees. Net Worth: The total value of an individual’s assets (e.g., savings, investments, property) minus their liabilities (e.g., debts). Portfolio: The collection of investments (stocks, bonds, ETFs, etc.) owned by an individual or entity, designed to meet financial goals. Precious Metals: Valuable metals like gold, silver, platinum, or palladium, used as investments or hedges against inflation and economic uncertainty, held as coins, bars, or through ETFs. Real Estate Investment Trust (REIT): A company that owns or finances income-producing real estate, allowing investors to invest in property without direct ownership. Risk Tolerance: The degree of uncertainty or potential loss an investor is willing to accept in their investments, varying based on goals and financial situation. Savings Account: A bank account that earns modest interest and allows easy access to funds, ideal for short-term savings or emergency funds but with lower returns than other investments. Savings Bond: A government-issued bond, like U.S. Treasury Savings Bonds, where investors lend money for a set period. It’s low-risk with guaranteed returns, often used for long-term savings.
Sector Funds: Mutual funds or ETFs investing in companies within a specific industry (e.g., technology, healthcare), offering targeted exposure but higher risk due to limited diversification. Stocks: Shares of ownership in a company, allowing investors to earn profits through price increases or dividends, but carrying higher risk due to market fluctuations. Wealth: The accumulation of financial resources and assets, including money, investments, and property, that contribute to financial security and independence. This financial glossary will be updated with new terms as needed. Suggestions for additional terms? Leave in the comments section below. Stay in touch with Wealth From Chaos by subscribing to our free email list by clicking here! 

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